Leveraging Lean Six Sigma to Increase Your SSO Value
As companies strive to re-invent themselves and take productivity to the next level, it is imperative that they change the way they view the work they do. The value that your SSO brings to your clients is increased productivity and highest quality service at the lowest possible cost. Lean Six Sigma can play a large part in helping to add value for your clients and to find ways to execute your work better, faster and at lower cost.
Value Viewed by the Client
By definition, value-added activities transform or shape business processes to meet requirements defined by the client. Through good communications and a close working relationship you stay current with any changes in client needs.
Non value-added activities consume time and resources while adding no value to the overall process.
While Six Sigma typically focuses on improving the quality of processes by eliminating defects and variability, Lean typically focuses on reducing costs through process optimization (improving speed while reducing waste) to add value for the client. By combining the best of both methodologies, the goal of Lean Six Sigma is to eliminate or reduce cost due to waste in time and resources while increasing speed. It is only through fast and responsive processes that we can deliver the highest quality of services at the lowest possible cost.
Metrics – Speed and Waste in a Transactional Organization
Metrics determine whether a process is a "lean" process. Time and waste are the primary measurements to consider in transactional processes.
In Lean Six Sigma, lead time is viewed as the entire time from initial request through delivery. This works in both transactional and operational processes. Examples include the amount of time required to:
- Approve a requisition for hire
- Approve an authorization for expenditure
- Resolve a customer's complaint
- Update an informational database
- Resolve an order exception
- Collect past-due money from a customer
- Process a customer's request for rebate payment
- Generate a client proposal or contract renewal
To determine the waste, ask if the task is value added or non-value added. Is the task delivering the most value from your client’s perspective while consuming the fewest resources by eliminating waste?
Examples of waste may include:
- Checking work from a prior process step
- Reworking or reformatting data from a prior process so that it can be used
- Paying for hardware, phones, phone lines or voice mail accounts that aren't used
- Paying to maintain multiple web sites that have low usage
- Repeatedly entering the same information in different databases
- Waiting for information to arrive from a different source
- Waiting for resources to become available
- Creating reports that aren't used or read
Value Stream Mapping
Value stream mapping is a fundamental technique of Lean Six Sigma and a valuable tool for helping identify waste in a process (wasted steps, time, or resources).
It allows you to analyze your process from an outside-in approach. A value stream map is generated by directly observing the flow of material and information detailing the relationship between them visually, and then envisioning a future state with much improved performance. Value stream mapping helps you to visualize entire work flow from beginning to end, not just a single process. It highlights waste in the value stream, which quickly allows you to identify improvement opportunities. In a transactional environment, the process you analyze begins and ends with the customer.
Many times, waste or lack of speed in the value stream is not the real problem; rather, it is a symptom. For example, the number of manual adjustments needed may be a symptom of bad data passed on from another department. Lack of speed in a process may be due to the idle time between process steps, such as waiting for approvals or requiring too many approvals, which will also be identified in the value stream mapping process.
The process below is a simplified example of a value stream map. The customer submits a request to your company, of which 70 percent are submitted by fax. Inherently, required data may be missing from the original request and require contacting the customer for additional information. Information may be illegible due to the quality of the fax copy, which can result in a higher number of data entry errors. While the process time to review and enter the request into the approval system takes just two hours, the wait time between those two process steps can be as much as four days. The question to ask is "why" and begin investigating ways in which that time can be reduced.
In this example, by identifying the opportunities to eliminate waste and then executing on those improvement opportunities, it is possible to reduce the lead time of 17 days by 50 percent or more, allowing you to improve response time, process more requests, and use fewer resources to do so.
Waste and lack of speed are obstacles to an effective, well-run, world-class transactional organization. Value stream mapping and the whole Lean Six Sigma approach can help your SSO fulfill your promise to your clients for increased productivity and highest quality service at the lowest possible cost.
About the Author
Rick Laino has been with 3M for 27 years, in various sales and marketing assignments. Recently, he has used this experience to lead the efforts of the Business Services organization for the Industrial and Transportation business at 3M. Under his leadership, the largest business sector within 3M has transformed their business services area by integrating best in class processes within customer service, training and development, pricing and merchandising, administration and web & data processes. This model has been effective in providing increased productivity and significant service improvement, highlighting on employee development and leadership.
Rick has recently been appointed to the Editorial Board of Shared Services News.